Catriona Burns is the portfolio manager for Wilson Asset Management’s WAM Global Fund.
How has Bandai Namco performed since Geoff [Wilson] pitched it at Sohn last year?
Bandai Namco is up over 40 per cent. The company generates its profits through video games, toys and entertainment parks, but it is, above all, an intellectual property (IP) company.
We saw an opportunity for the business to further monetise the value of its IP and capture share in the rapidly growing Chinese gaming market.
In our view, there was a disconnect between the valuation of the stock relative to its global peers. The company has delivered strong results in the past year, exceeding market expectations.
Which stock in your portfolio has the most untapped potential?
We are excited about the outlook for various companies in the portfolio including CTS Eventim (the European Ticketek equivalent), CDW (US IT services leader), Airbus (global aerospace company), and Kobe Bussan (Japanese discount supermarket operator).
Given your emphasis on small-to mid-caps, what’s the attraction in owning big cap names like Amex?
We have the flexibility to invest across the market wherever we see opportunities. As an undervalued growth company, Amex fit our investment process.
It has a solid industry position, high quality management team, strong earnings growth potential and we saw a valuation disconnect given these factors at the time we invested in the company. The catalyst was the potential for earnings beats, which we have seen over multiple quarters.
We are passionate about investing in small-to mid-cap companies and our process naturally gravitates to them as their growth potential is often higher. However, if a larger company rates using our process then we will buy it.
What’s the best advice you’ve ever been given from an investment mentor?
Avoiding the losers can be as important as picking the winners. Obviously we all make investing mistakes but minimising the blow ups can add significantly to investment returns achieved overtime.
And, bad balance sheets significantly reduce optionality, so avoid them.
As a global investor, do you place much faith in trying to anticipate market rotations?
We are picking individual stocks that fit our investment process, so we are less focused on trying to anticipate market rotations, but consistently monitor market positioning.
We’re always looking for new TV shows to stream. What’s caught your eye?
I’m just back from a work trip and watched a couple of Netflix shows while travelling: Inside Bill’s Brain and Sour Grapes.
Finally, a recommendation for the readers on a good value quick bite in Sydney?
Kitchen by Mike is an office favourite – the menu is always changing, it’s good value and reasonably healthy, if you stay away from the desserts!